The COP27 climate talks underlined the need for further coordination amongst countries. However, they confirmed that the world will not backtrack on the Paris Agreement, an important step towards climate justice.
Companies that have invested early in the low-carbon transition, such as those aligning themselves with the Paris Agreement, may be better placed to create better long-term returns for their investors.
Climate-aligned benchmarks are designed for climate action, immediately reducing a portfolio’s carbon intensity and absolute emission levels based on a target trajectory.
Discover more about climate investing at Amundi ETF.
Hitting net zero by 2050 requires a major shift from more polluting sources of energy to cleaner, more sustainable ones.
To meet the International Energy Agency’s net zero by 2050 scenario, investments in energy must surge from the current rate USD 2.3 trillion annually to USD 5 trillion by 2030 and then USD 4.5 trillion by 20501 .
This creates huge investment opportunities in companies exposed to alternative energy, energy efficiency and the battery value chain.Russia’s invasion of Ukraine in February 2022 has further reinforced the case for new energy by highlighting Europe’s over-dependence on a partner with significant ideological differences.
[1] International Energy Agency (NZE 2021 Report)
LYXOR MSCI NEW ENERGY ESG FILTERED (DR) UCITS ETF | 0.60% OGC*
With rising commitments to climate action - and an increasingly firm hand from regulators - many investors are turning to ‘green’ bonds to fund pro-climate projects.
Although still relatively small for now and led by corporate issuances, the green bond market is growing fast and receiving support from a number of fundamental drivers. The market is benefitting from growing investor demand for green assets and policymakers and companies aligning themselves with the goals of the Paris Agreement. The European Commission has introduced its REPowerEU plan, which includes plans to significantly accelerate the deployment of renewable and clean energy capacity and ramp up energy-efficiency initiatives. The plan also involves additional investments of EUR 210 billion over the next five years.
Despite a general slowdown in primary issuances, the green bond primary market remains dynamic with over USD 370bn issued in 2022 and is still well supported by strong supply and high investor demand. The Bloomberg MSCI Global Green Bond 1-10 Year Index bears much lower duration (5.1 years) compared to sovereign equivalents. This allows a global exposure to the green bond market while limiting duration risk.
LYXOR GLOBAL GREEN BOND 1-10Y (DR) UCITS ETF | 0.15% OGC*